Supporting Visitors, the Economy & our Neighborhoods

California State Regulation

What Is the California Coastal Commission's Position on Short-Term Rentals?

The Coastal Commission has routinely rejected proposed ordinances by jurisdictions that would prohibit short-term rentals in the coastal zone. Click on each city to see the Commission's actions: Pismo Beach, Encinitas, Hermosa Beach, San Clemente, and Santa Monica. Also see KQED article on the Coastal Commission's interaction with Laguna Beach.

For an example of an ordinance that the Coastal Commission will accept, see Trinidad. This letter also defines vacation rentals as a "residential use" by stating, “…the (LCP) amendment only addresses occupancy of residences
by tourists for dwelling, lodging or sleeping purposes, which by definition,
comprises a residential use.” This contradicts opponents claim that vacation rentals are a commercial use.

California Coastal Commission Strongly Supports Short-Term Rentals

The California Coastal Commission is getting much more proactive. The Commission sent a letter dated December 6, 2016 to jurisdictions all along the coast advising them to create/update their LCPs to allow short-term rentals. Click here for the letter. While it is very similar to the June 23, 2016 Coastal Commission letter discussed below to Monterey County signed by a district director, this recent letter is signed by Steve Kinsey, the Chair of the Coastal Commission. This recent letter also outlines some parameters of an acceptable ordinance.

The recent letter furthers our efforts with Monterey County and is expected to have an impact with the City of Monterey and with Carmel-by-the-Sea, both of whom currently ban short-term rentals. Each coastal jurisdiction is required to periodically update their local coastal plan (LCP). The Coastal Commission expects to see LCPs that have a permitting process for short-term rentals. MCVRA's attorney Gary Patton sent a letter to the Coastal Commission strongly supporting their position on short-term rentals and asking how the Commission intends to follow up with each jurisdiction. Click here for Gary's February 2017 letter.

Earlier in June 2016, the California Coastal Commission (CCC) wrote a letter to Monterey County Resource Management Agency director Carl Holm stating short-term rentals (STRs) are allowed, not prohibited, in the coastal zone. This action by the CCC resulted from repeated communications by MCVRA directors and members with the CCC asking the Commission to intervene. Earlier in June MCVRA director Clyde Freedman advocated our position at length with Kevin Kahn, CCC District Supervisor. Our attorney, Gary Patton followed that conversation with a superb letter to the CCC outlining the issue in Monterey County and asking for CCC’s help. See Gary's June 2016 letter.

When the County issued its “interpretation” in July 2015 that STRs are prohibited in the coastal zone, MCVRA argued that the County was wrong and the “interpretation” did not comply with the Coastal Act. MCVRA believed the CCC would agree. The CCC has rejected other proposed bans on STRs in several coastal cities. Now the CCC has weighed in.

The CCC letter reads:

“At this juncture it is our (CCC) opinion that vacation rentals are allowable in Monterey County’s coastal zone under the LCP (Local Coastal Plan), and we highly recommend that instead of attempting to suggest they are prohibited or pursuing (citing) such prohibitions, that Monterey County instead work with us to develop regulations that serve to ensure Coastal Act-required protections are in place to address any potential concerns…”

“…efforts along these lines were undertaken by the County back in 1997, but those efforts were apparently discontinued. We would suggest that now is an appropriate juncture to restart that effort.”

The letter goes into detail and is well worth your time to read. Click CCC Letter. Of course none of this applies to non-coastal properties since the CCC has no authority there. And since the letter is addressed to Monterey County, it does not directly address the existing STR bans in the cities of Carmel by the Sea and the City of Monterey.

MCVRA continues to be in frequent contact with the Coastal Commission. On November 3, 2016 we appealed at a Coastal Commission Workshop on Lower Cost Visitor Serving Accommodations. See press coverage. The Commission is very supportive of short-term rentals. It's staff recommended "that the Commission continue to support provision of short-term vacation rentals in the coastal zone. The Commission should continue to discourage bans and other broad prohibitions on vacation rentals, and it should continue to support local governments in developing reasonable and balanced regulations through LCP updates and/or new LCPs that address neighborhood and affordable housing issues while allowing for regulated short term vacation rentals in residential and other zoning districts." Click here for the workshop report and go to pages 49-51.

There is a lot of work before us. The CCC letter is a setback for STR opponents and we expect them to now push to have a very onerous ordinance. We need to make sure that the County doesn’t enact an ordinance that “permits” STRs, but permits them in such a way that has the same practical effect as a prohibition. The CCC will be on our side!

Public Access to the Coast

California's historical guarantee of public access to the shoreline has been
under increasing attack in recent years as oceanfront property owners try to keep
sections of beach off limits to others. But a law enacted by California in 2014 gave
the Coastal Commission the authority to levy hefty fines on recalcitrant and combative
property owners. In the most extreme cases, the fines could reach $15,000 a day.

MCVRA has been focused on local short-term
rental (STR) regulations but we must also think state-wide. The home sharing trend
is now thriving globally. Large online vacation rental business (OVRBs) like HomeAway,
VRBO and Airbnb are getting lots of media attention, not all positive, in
San Francisco, New York and virtually every city in between. In 2015, the California State
Legislature took notice and proposed a bill that would have affected your business. Senate Bill 593 (SB 593) would have reinforced local laws already on the books. Where vacation rentals are legal and subject to taxation, the bill would have assisted local jurisdictions in their regulation and collection of Transient Occupancy Taxes (TOT). Where vacation rentals are illegal by local ordinance, the bill would have prohibited OVRBs from listing a home for transient use. MCVRA strongly supports the payment of TOT that many
cities and counties depend on but we do not support legislation that would strengthen the prohibition of STRs. MCVRA's voice helped stop the bill but we can expect future efforts of this sort.